What does the right of set-off allow a purchaser to do?

The right of set-off is an important legal provision that enables a purchaser to manage financial transactions more effectively. Specifically, it allows the purchaser to deduct any debts they have under one contract from payments that are due under another contract with the same party. This is particularly useful in situations where the purchaser might have outstanding receivables or obligations, as it provides a mechanism to ensure that only the net amount is paid.

For example, if a purchaser owes a supplier money for goods received but is also owed money by the same supplier for services rendered, the right of set-off allows them to offset these amounts. Instead of engaging in multiple transactions where payments are exchanged, this process simplifies the financial settlement, ensuring that the purchaser only pays the difference between the debts, thereby reducing cash flow pressure.

This concept is essential for maintaining liquidity and fostering mutually beneficial relationships between contracting parties. The other options, while they may pertain to different aspects of contract management, do not accurately describe the function or benefits of the right of set-off.